Junior Certificate Business Studies Cash Account First Years
2
The Cash Account The Cash Account (A/C) is used to record a household’s income and expenditure. Income is something earned – it is money coming into the household. E.g. Wages, salary etc. Expenditure is money going out of the house. E.g. Food, petrol, telephone & ESB bill. The left hand-side of a cash account is the debit side (Dr). On this side you put the income. Rule: Debit (Dr) the money you have and receive. The right hand-side of a cash account is the credit side (Cr). On this side you put the expenditure. Rule: Credit (Cr) the money you owe and pay out. Dr. Cash Account Cr. This is the debit side. This is the credit side. Your put money you have and receive on this side (income). You put money you owe and pay out on this side (expenditure). The Balance is the amount of money left over at the end of the month and available at the beginning of the next month.
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Transcript of Junior Certificate Business Studies Cash Account First Years
The Cash Account
The Cash Account (A/C) is used to record a household’s income and expenditure.
Income is something earned – it is money coming into the household. E.g. Wages, salary etc.
Expenditure is money going out of the house. E.g. Food, petrol, telephone & ESB bill.
The left hand-side of a cash account is the debit side (Dr). On this side you put the income.
Rule: Debit (Dr) the money you have and receive.
The right hand-side of a cash account is the credit side (Cr). On this side you put the expenditure.
Rule: Credit (Cr) the money you owe and pay out.
Dr. Cash Account Cr.
This is the debit side. This is the credit side.Your put money you have and receive on this side (income).
You put money you owe and pay out on this side (expenditure).
The Balance is the amount of money left over at the end of the month and available at the beginning of the next month.
Sample Question
John and Mary Soap had the following transactions during the month of September.
September Details €1st Cash in hand 1202nd Mr. Soap received his wages 13004th They paid for groceries 3506th They paid for petrol 1409th They paid for meat at butcher’s 6015th Mrs. Soap received her wages 125018th They paid telephone bill 18020th They paid for groceries 36022nd They went to cinema 4526th They paid ESB bill 16528th They serviced their car 220
Answer
Dr. Cash Account Cr.Date Details Cash Date Details Cash
€ €1st Sept Balance b/d 120 4th Sept Groceries 3502nd Sept Mr. Soap's wages 1300 6th Sept Petrol 14015th Sept Mrs. Soap's wages 1250 9th Sept Butcher's 60
18th Sept Telephone 180 20th Sept Groceries 360 22nd Sept Cinema 45 26th Sept ESB 165 28th Sept Car Service 220 30th Sept Balance c/d * 1150 2670 26701st Oct Balance b/d 1150
* To balance the account:1. You add up the biggest side. (Dr. in this case = 2670).2. You put the same total on the other side (Cr. Side in this case).3. You add what's on the smaller side (Cr. side in this case) and you take it away from the total (2670 in this case).4. This figure is your balance c/d at the end of the month (1150).5. You put this figure (1150) on the other side at the beginning of the next month and it changes to balance b/d.
